Hi there Tomo,
Sorry i haven't come to play here lately, have some RL things to deal with, but as a bit of a distraction i was going over the IJNAF and IJAAF alternate birds last night. So indeed Nakajima working on an single engine interceptor instead of the J1N is a much better use of their design resources. Incidentally when the J2M troubles became apparent Nakajima offered a variant of the Ki-44 as J2N for the Navy, so your idea has good merit, either a Ki-44 derivative or a clean sheet design flying in 1941/42 would again free Mitsubishi to work on the A7M.
Hopefully the things will work out for you
IMO - Nakajima might've design a CV-capable long-range fighter sized & shaped like the future Ki-84 or Ki-100, or indeed a big-wing Ki-44? Folding wings, butterfly flaps, self-sealing fuel tanks and back armor from the get-go (as in the J1N), two cannons + 2-4 LMGs for the start.
For the Mitsubishi - make a no-nonsense fighter around the Ha 104 with water-alcohol injection, sorta Japanese Sea Fury? We know that Ha 104 made a lot of power even with 87 oct fuel - the big engines running on low boost have a lot of appeal for the Japanese. If/when the Ha-43 materializes, up-engine the fighter by all means.
BTW - both of these should've been able to double as dive-bombers ASAP.
The C6N was a good bird, but actually the Ki-46 (which the IJNAF did use) was faster ( refering to the Ki-46_III version with ha-112-III engine), so why not juts build more of those for the navy? Ok it can't land on a carrier but since the C6N was never used on CVs anyway, and this thread implies a bit of hindsight, just go for more Ki-46s, again freeing Nakajima's designers to work on something more useful.
IJN and IJA were not friends
But indeed, the Ki-46 was very good in what it did.
Carrier-borne recon job can be undertaken by a LR fighter outfitted with cameras, as well as by D4Y outfitted with cameras.
BTW and IMO - the earlier P1Y Ginga instead of the G4M? The G4M was the appearance and size of a transport A/C (it was used as one, too), while the P1Y was a much smaller and sleeker job, gaining 70-80 km/h even vs. the fastest G4M versions. Both carried the same (small) bomb load over great distances.
Not sure if i mentioned it before, but also cancelling that totally useless G5N would free Nakajima to design and fly the B6N in 1941, one year early (powered by the 1500HP Kasei or Ha-109). Perhaps the first units might be ready by late 1942, at a time when the B6N would be almost as fast as the F4F, the main USN fighter, it would be much harder to catch (at least for a while) compared to the slow and vulnerable B5N.
Yes, realistically the G5N was a waste of limited resources, even if they managed to make a meaningful number of them - it can't reach USA, impractical for tactical duties, the existing 2-engined bombers (or the ones in the pipeline) can tackle anything in China or Indochina.
B5N needs to be replaced ASAP, whether by an earlier B6N, or by Japanese forgetting their favorite tool - torpedo bomber - and going all-in with dive bombers and fighter-bombers. Having to fly at low altitude, straight and level in the teeth of many, many hundreds of 20mm and 40mm AA guns is not conductive to the health of crews or aircraft they flew... But then, a dive bomber flying at 15000 ft is just where the VT-fused ammo for the 5in gun awaits; granted, it is 1944 for the VT fuse to enter the stage.
OTOH, one cannot help but give a lot of credit to the Japanese aircraft designers, engineers and technicians for the sheer number and variety of relatively trouble-free aircraft they made in short years of 1940-45 (well, not that short for the people on the receiving end of the atrocities). Granted, it didn't help out with economies of the scale required for the all-out war the ww2 was.